Malaysia records best trade surplus since 2008

Malaysia’s exports in 2019 decreased by 1.7% to a total of RM986.4 billion compared with RM998.01 billion in 2018.

KUALA LUMPUR: Malaysia recorded a 2.5% decrease in overall trade performance in 2019 to RM1.834 trillion, due to the challenging global economic landscape.

However, the trade surplus widened by 11% to RM137.39 billion compared with RM123.78 billion in 2018, making it the largest trade surplus since 2009. This is Malaysia’s 22nd consecutive year of achieving a trade surplus.

Deputy Minister of International Trade and Industry Ong Kian Ming said among the challenges last year were the global trade tensions between the US and China, and between Japan and South Korea.

“It was very challenging for Malaysia and also other open economies around the world.”

He also pointed to lower commodity prices, affecting crude oil and palm oil, which have since recovered. “There were periods where these prices were in the doldrums, and this affected our overall trade figures.”

Ong also attributed the lower trade performance to a downturn in global trade for the semiconductor industry.

Ong said the trade outlook for 2020 was expected to remain modest amid a challenging global environment. He hoped it would reach a target of RM2 trillion in trade surplus due to possible improvements in global trade tensions and oil prices.

Malaysia’s exports in 2019 decreased by 1.7% to a total of RM986.4 billion compared with RM998.01 billion in 2018.

Meanwhile, 2019 year-on-year imports decreased by 3.5% to RM849.01 billion, compared with RM877.74 billion in 2018.

Manufactured goods continued to have the largest share (84.6%) of exports at a total of RM834.17 billion. This was followed by mining goods (8.1% of total exports, worth RM80.37 billion) and agricultural goods (6.6% of total exports, worth RM64.86 billion).

The electronics and electrical (E&E) sector remained the largest contributor to the country’s exports in 2019, boosted by the manufacture of semiconductor devices and integrated circuits (ICs). Singapore was the largest market for the industry.

For palm oil, Ong said export volume increased to 10.9%, or 28 million tonnes, despite a decline in export value. India (43%) China (9.6%) and the Netherlands (9.2%) were the major markets for the commodity.

Ong also said domestic exports increased in 2019 to RM815.21 billion. The main products driving the higher domestic figures were E&E products, optical and scientific equipment and petroleum products.

Others included processed food such as cocoa products (RM19.8 billion), iron and steel products (RM18.64 billion), furniture (RM10.64 billion), aerospace such as aircraft parts (RM8.04 billion) and auto parts (RM3.95 billion).

Meanwhile, intermediate goods had the highest share of total imports at 55%, or RM467.18 billion. Imports of consumption goods, including pharmaceutical products, increased by 1.3% to RM74.01 billion.

Global markets

Last year, China surpassed Singapore as Malaysia’s largest export market and is now our largest trading partner, followed by Singapore and the US.

A total of 14.2% of Malaysia’s exports went to China last year while 20.7% of Malaysia’s total imports came from China.

When it came to the US, Ong said it was the only global market with clear improvements in trade performance with Malaysia due to the US-China trade war.

US trade with Malaysia increased by 5.6% to RM164.45 billion, exports increased by 5.5% to RM95.78 billion, and imports increased by 5.7% to RM68.67 billion.

Meanwhile, Malaysia experienced higher exports to Asean countries such as Vietnam, the Philippines, Brunei and Cambodia.

However, overall trade with neighbouring countries dropped by 4.4% to RM448.91 billion.

Exports to the European Union (EU) remained high despite a 2.9% drop to RM95.78 billion. Exports to UK in particular grew by 5.2% to RM9.09 billion despite political uncertainties surrounding Brexit.

Ong also noted positive trade performances with emerging, smaller markets such as Mexico, Egypt, Togo, Nigeria, Uzbekistan, and Greece.